Is the Engel & Volkers Franchisee obligated to ensure that Licensed Users comply with the Franchisee's obligations?
Engel_Volkers Franchise · 2025 FDDAnswer from 2025 FDD Document
- 7.5 Franchisee's Obligations. Franchisee and the Licensed Users shall only use the Integrated Product Suite and the Licensed Materials for the exclusive business purpose of operating the Franchisee's Residential Real Estate Brokerage under the Franchise Agreement at Franchisee's Approved Location, or acting as a Sales Advisor for the Franchisee's Residential Real Estate Brokerage under the Franchise Agreement, in each case in accordance with this Agreement and the requirements of the ENGEL & VÖLKERS System, as may be amended from time to time.
No other use of the Integrated Product Suite and the Licensed Materials is permitted.
7.6 Conditions of Use. Franchisee agrees that the conditions of use are as follows:
7.6.1 Franchisee shall be obliged to ensure by separate agreement with each Licensed User that any of Franchisee's obligations stipulated in this Agreement are also to be complied with by its Licensed Users;
7.6.2 Neither Franchisee nor any of its Licensed Users or staff members or Sales Advisors shall, or shall allow any other person to: modify, copy, adapt, reverse engineer, decompile, disassemble or otherwise use the Integrated Product Suite or the Licensed Materials;
7.6.3 Franchisee may not sublicense, assign or transfer, directly or indirectly or by operation of law or otherwise, any rights in the Integrated Product Suite or in the Licensed Materials;
7.6.4 Franchisee shall comply with all specifications issued by Franchisor with respect to the Integrated Product Suite and required hardware, at Franchisee's expense;
7.6.5 It is Franchisee's and each of its Licensed User's responsibility to obtain and maintain at its sole cost the necessary equipment and hardware as prescribed by Franchisor to use the Integrated Product Suite and Licensed Materials.
Upgrades to hardware will be required if the Integrated Product Suite requires an upgrade or if the hardware becomes unable to perform the required functions for electronic reporting, and Franchisee and its Licensed Users must bear the cost to upgrade;
Source: Item 22 — CONTRACTS (FDD page 88)
What This Means (2025 FDD)
According to Engel & Volkers' 2025 Franchise Disclosure Document, the franchisee is obligated to ensure that its Licensed Users comply with the franchisee's obligations. Specifically, the Engel & Volkers franchisee must ensure, through a separate agreement with each Licensed User, that any of the franchisee's obligations outlined in the Franchise Agreement are also followed by its Licensed Users. This requirement extends to the use of the Integrated Product Suite and Licensed Materials, ensuring they are used exclusively for operating the Residential Real Estate Brokerage under the Franchise Agreement.
This obligation means that Engel & Volkers franchisees cannot simply delegate responsibilities to Licensed Users without ensuring they are contractually bound to uphold the same standards and requirements as the franchisee. The franchisee must have agreements in place that legally compel Licensed Users to adhere to the franchisee's obligations. This protects the Engel & Volkers system and brand by ensuring consistent compliance across all individuals operating under the franchise.
Furthermore, neither the franchisee nor its Licensed Users are allowed to modify, copy, adapt, reverse engineer, decompile, disassemble, or otherwise misuse the Integrated Product Suite or the Licensed Materials. The franchisee also cannot sublicense, assign, or transfer any rights related to the Integrated Product Suite or Licensed Materials. The franchisee is responsible for ensuring compliance with specifications issued by Engel & Volkers regarding the Integrated Product Suite and required hardware, bearing the costs associated with these requirements.
Ultimately, the Engel & Volkers franchisee bears the responsibility for the actions of its Licensed Users, making it crucial to implement thorough training, monitoring, and contractual safeguards to ensure everyone operating under the franchise is aligned with the brand's standards and legal obligations. This requirement is typical in franchising, where the franchisee is responsible for the actions of its employees and contractors.